If an investor knows that he or she will need a certain amount of capital at a given point in time in the future, then a bullet investment strategy might be the best way to go. This strategy suggests that an investor stagger purchase dates on bonds that all mature at the same time.

By staggering the purchase of bonds, investors can more efficiently seek out securities that have more attractive interest rates. And since all of the bonds have the same maturity date, investors are able to receive a potentially more attractive inflow. However, because the investor is staggering the purchase of the bonds, it can lead to a risk that interest rates will fall over the bond purchasing period. Keeping a close eye on the interest rate environment is key to successfully following this strategy (Pylypczak-Wasylyszyn, 2015).